Industry giants in the systems integration (SI) and information technology (IT) service sector are doubling down on their development of cutting-edge AI technologies and the introduction of innovative services. They are bringing in renowned AI specialists from around the globe and also allocating top internal talent to dedicated departments, demonstrating their commitment to securing top-tier talent.
The consensus within the industry is that the demand for AI technology and services is on the verge of exploding. Companies believe that by reducing internal transactions and increasing their external business activities, AI can unlock substantial revenue growth.
By early 2021, it has been reported that major IT service providers completed the formation of specialized AI technology and service development teams. This move is primarily aimed at expanding their business reach beyond internal group needs, as traditionally, a significant portion of their revenue – ranging from 60% up to 90% – comes from within their corporate groups.
LG CNS has established an AI Center staffed by over 200 members. The AI Center is structured into three core research and business units including AI business management and divisions focusing on language, vision, data, and AI engineering. An executive with experience in global IT as well as in companies such as SK Telecom and Emart is at the helm of this center. Among their initiatives, they are developing and offering a suite of generative AI services like intelligent answer systems, visual content automation, and advanced AI coding solutions.
Samsung SDS has dedicated units like XTerra Lab and an AI research team, employing around 200 people. XTerra Lab delves into AI as well as investigating data analytics, cloud, and distributed computing. A recent highlight for Samsung SDS was the appointment of its first executive in his 30s to lead XTerra Lab. The AI research team focuses intensively on core technologies for cloud AI services and AI-powered solutions.
SK C&C unveiled the G.AI division in the second half of the previous year, an enhancement and reorganization of its former AI research and development team. The group is spearheaded by a leader who started his career as an IT developer in 2006.
Moreover, POSCO DX founded a new AI Technology Center and built a robust team of specialists, led by an executive with a history at Hyundai Motors. After developing an advanced language model tailored to manufacturing, the company plans to extend these AI capabilities to its group’s businesses and widen their external ventures.
Other firms like Lotte and Kolon are also investing heavily in AI technology development and strengthening their AI business segments. Lotte Innovate fashioned a new AI Tech division, and Kolon Benit modified its previous AI service development unit into an R&BD (Research and Business Development) department, represented by seasoned experts.
Key Questions:
1. What are the primary motives behind major corporations creating new AI units and recruiting experts?
2. How is the demand for AI technology and services expected to impact the business strategies of these corporations?
3. What types of AI services and technologies are these new corporate divisions focusing on?
Answers:
1. The primary motives behind these actions are to strengthen companies’ competitive edge by advancing their capabilities in AI, to diversify their business offerings, and to capitalize on the projected surge in demand for AI services and technology.
2. The demand for AI technology and services is expected to result in businesses shifting their focus from internal transactions to external, market-facing products and solutions, thereby potentially increasing their revenue streams.
3. These divisions are focusing on a range of AI technologies such as intelligent automation, language processing, visual content automation, data analytics, AI for cloud services, and industry-specific solutions such as AI tailored to manufacturing processes.
Key Challenges and Controversies:
– Data Privacy and Security: The expansion of AI services raises concerns about the handling of personal and sensitive data.
– Talent Acquisition and Retention: There is fierce competition for AI experts, which may drive up costs and create talent shortages.
– Ethical Considerations: Integrating AI into business processes might lead to ethical dilemmas related to job displacement and biased decision-making in AI systems.
– Balancing Innovation and Regulation: While companies must innovate, they also have to adhere to potentially restrictive AI regulations that vary across regions.
Advantages:
– Innovation: Developing AI technologies can lead to the creation of innovative products and services.
– Efficiency: AI can significantly improve operational efficiency by automating tasks and analyzing large sets of data.
– Competitive Edge: Companies with advanced AI capabilities may gain a competitive advantage in the marketplace.
Disadvantages:
– Cost: Initial investment in AI technology and recruitment of specialists can be substantial.
– Complexity: Integrating AI into existing systems can be complex and time-consuming.
– Disruption: AI advancements can disrupt existing business models and workforce structures.
Suggested Related Links:
– IBM: A leading example of a corporation with a long history in AI research and development.
– Microsoft: Notable for their significant investments in AI and cloud computing.
– DeepMind: A pioneer in artificial intelligence known for its cutting-edge research.
– OpenAI: An AI research lab that publishes innovative AI technologies and has collaborated with corporations.
Note: All the links provided lead to the main domains of organizations renowned for their work or involvement in the AI sector, ensuring the URLs are 100% valid at the time of knowledge cutoff.